What is the franchisee's obligation to indemnify Indemnitees under the Brueggers Bagels franchise agreement?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee agrees at all times to defend at their own cost, and to indemnify and hold harmless to the fullest extent permitted by law, Franchisor, its partners or any limited partner, its subsidiaries, and other entities owned by it, its affiliates (including without limitation all entities and persons owned by or owning, directly or indirectly, an interest in Franchisor, or its successors, assigns and designees of any such entity, officers, directors, employees, agents, contractors, and other entities and persons providing services for or otherwise acting on behalf of Franchisor (including, without limitation, Franchisor's affiliates in any capacity or role), and the respective directors, officers, employees, agents, shareholders, members, managers, partners, designees, and representatives of each (Franchisor and all of such others referred to herein collectively as "Indemnitees") from all damages, losses, expenses (including without limitation reasonable attorneys' fees), actions, suits, proceedings, claims, demands, investigations, or formal or informal inquiries (regardless of whether same is reduced to judgment) or any settlement thereof which arises out of or is based upon or related to any of the following: (a) Franchisee's alleged infringement or any other violation or any other alleged violation of any patent, trademark or copyright or other proprietary right owned or controlled by third parties; (b) Franchisee's alleged violation or breach of any contract, federal, state or local law, regulation, ruling, standard or directive of any industry standard; (c) libel, slander or any other form of defamation by Franchisee; (d) Franchisee's alleged violation or breach of any warranty, representation, agreement or obligation in this Agreement; (e) any acts, errors or omissions of Franchisee or any of its agents, servants, employees, contractors, partners, proprietors, affiliates, or representatives; (f) latent or other defects in the Bakery, whether or not discoverable by Franchisor or Franchisee; (g) the inaccuracy, lack of authenticity or nondisclosure of any information by any customer of the Bakery; (h) any services or products provided by Franchisee at, from or related to the operation at the Bakery; (i) any services or products provided by any affiliated or nonaffiliated participating entity; (j) any action by any customer of the Bakery; and, (k) any damage to the property of franchisee or franchisor, their agents or employees, or any third person, firm, corporation or other legal entity, whether or not such losses, claims, costs, expenses, damages, or liabilities were actually or allegedly caused wholly or in part through the active or passive negligence of franchisor or any of its agents or employees, or resulted from any strict liability imposed on franchisor or any of its agents or employees.
Source: Item 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to the 2025 Brueggers Bagels Franchise Disclosure Document, the franchisee has specific obligations to defend, indemnify, and hold harmless the Franchisor and related parties ("Indemnitees"). This means the franchisee is responsible for protecting the Indemnitees from various costs and liabilities arising from the franchisee's business operations. This obligation extends to the fullest extent permitted by law, meaning that Brueggers Bagels can pursue the maximum level of protection allowed under applicable statutes.
The franchisee's duty to indemnify covers a wide range of potential issues. These include claims related to intellectual property infringement (such as patents, trademarks, or copyrights), breaches of contract or violations of laws and regulations, defamation, and breaches of warranty or agreement. It also extends to acts, errors, or omissions by the franchisee or their personnel, defects in the Bakery, inaccuracies in customer information, and issues related to the services or products provided at the Bakery. This broad coverage means that Brueggers Bagels franchisees could be held responsible for a significant array of potential liabilities.
The indemnification extends to damages to property and losses, claims, costs, expenses, damages, or liabilities caused by the franchisee. This applies whether or not such issues were allegedly caused by the active or passive negligence of Brueggers Bagels or resulted from strict liability imposed on Brueggers Bagels. The costs covered by this indemnification include reasonable attorneys' fees, costs associated with investigations, and the cost of settlements. This means a Brueggers Bagels franchisee could be responsible for covering substantial legal and financial burdens if a claim arises.
In practical terms, this indemnification clause places a significant financial risk on the Brueggers Bagels franchisee. It is essential for prospective franchisees to fully understand the scope of this obligation and to secure adequate insurance coverage to protect themselves against potential claims. Franchisees should also exercise caution in their business operations and ensure compliance with all applicable laws and regulations to minimize the risk of triggering the indemnification clause.